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Chinese insurer warns of defaults as ban on new products bites

2017-5-18 14:33| 发布者: 凡心| 查看: 94| 评论: 0

摘要: One of China’s largest insurers has warned of mass defaults and social unrest unless the regulator lifts a ban on its issuance of new products, the latest sign of stress in the industry caused by a c ...
One of China’s largest insurers has warned of mass defaults and social unrest unless the regulator lifts a ban on its issuance of new products, the latest sign of stress in the industry caused by a crackdown on financial risk.

In a letter to China’s insurance regulator seen by the Financial Times, Foresea Life Insurance warns that the company expects Rmb60bn ($8.7bn) in redemptions this year and might be unable to meet payouts unless it is able to sell new products.

In December, the China Insurance Regulatory Commission banned Foresea for three months from applying to sell new products. In February, the agency banned Foresea chairman Yao Zhenhua, China’s fourth-richest man, from the industry for 10 years.

In the letter dated April 28, Foresea asks the CIRC to resume new product approvals “in order to avoid inciting mass incidents by clients and localised and systemic risks, producing greater damage to the industry”. The term “mass incidents” is commonly used in China to describe demonstrations, protests and riots.

Foresea is a unit of Baoneng Group, a property and financial conglomerate that Mr Yao also chairs. Baoneng made headlines last year by attempting a hostile takeover of China Vanke, one of China’s largest residential developers.

Baoneng has used the sale of so-called “universal insurance” products to finance its stake in Vanke and other listed companies. Such policies are, essentially, investment vehicles offering high yields and guaranteed payouts on maturities. Distributed through banks, they bear little resemblance to traditional insurance, which pays out only in the event of a risk incident such as death, illness, or accident.

Deregulation of the insurance industry in recent years has led to the sharp rise of universal insurance sales, which has helped groups such as Foresea and Anbang Insurance Group to grow.

Foresea’s premiums soared from Rmb32bn in 2014 to Rmb100bn last year but tumbled 61 per cent in the first quarter this year. The date of Foresea’s letter indicates that, by late April, the regulator had not yet approved new Foresea products, despite the expiration of the three-month ban.

In a statement on its website late on Wednesday, Foresea said that “the company’s operations are normal and its cash flow is stable”, adding that it earned Rmb1.4bn in profits in the first quarter.

The CIRC did not respond to requests for comment.

Beyond Foresea, the CIRC has moved to contain universal insurance in recent months, amid President Xi Jinping’s call to curb financial risk. Analysts warn that the high yields offered by universal insurance force issuers to take risks in order to earn the returns necessary to meet promised payouts.

Many universal insurance products ostensibly carry long durations of five or even 10 years but the policies often include generous redemption terms, enabling investors to cash out of the products with minimal penalties.

Foresea’s warning that mass redemptions could leave the group unable to meet payouts highlights the liquidity risk created by taking on short-term liabilities to purchase long-term, illiquid assets.


根据英国《金融时报》看到的一封发给中国保险监管机构的信,前海人寿保险(Foresea Life Insurance)在信中警告预计今年将有600亿元人民币(合87亿美元)的退保金额,除非该公司能发售新产品,否则可能无法兑现支付。



前海人寿是宝能集团(Baoneng Group)旗下企业,这家房地产和金融集团的董事长也是姚振华。宝能试图对中国住宅开发商龙头企业万科(China Vanke)发起敌意收购,成为去年新闻头条。


保险行业近年来放松管制,导致全球保险销售大幅上升,从而帮助前海人寿和安邦保险集团(Anbang Insurance Group)等企业发展。













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